On May 5, 2020, the Oklahoma Supreme Court handed down an important decision that affects potential attorney fee exposure in insurance cases. The question in Hamilton v Northfield Insurance Co., 2020 OK 28, was whether the courts are to look at all of the insurer’s settlement offers in determining prevailing party status for attorney fees under 36 O.S. § 3629. This statute states that the insurer is the prevailing party if the judgment is less than the insurer’s offer, and that the insured is the prevailing party in all other instances. Courts had historically compared the judgment to all offers, including those after suit was filed, even up to the point of trial. Hamilton turned this practice on its head.

The Hamilton Court held that only offers made within the first 60 days after receipt of a “proof of loss” are relevant for comparison to the judgment. The Court reasoned that § 3629 only applies to claim settlement offers, not litigation, and that the statute’s purpose is to incentivize prompt investigation and settlement to avoid litigation. Thus, if the insurer fails to make an offer during the 60-day window, the insured will be the prevailing party if it obtains a judgment of any amount in a later suit, even if the judgment is less than the insurer’s late offer.

Hamilton‘s logical anchor to the “proof of loss” drastically narrows the insurer’s window of opportunity. Oklahoma state and federal courts have consistently held that a formal proof of loss is not required. Rather, the 60-day window is triggered by any notice from the insured sufficient for the insurer to act upon it with a settlement offer or rejection. This means that insurers must act quickly if they want to preserve any ability to shift attorney fees—and avoid potential exposure–under § 3629.